Big Money in Politics: 1% of 1% Contribute 28% of Campaign Funds

In the Class Warfare Department, The Sunlight Foundation posts a report on the 1% of the 1% of campaign financiers. According to their analysis of the 2012 election, 28% of political contributions to candidates, PACs, and Super PACs came from 31,385 individuals, one ten-thousandth of the U.S. population.

Put that in perspective: suppose you run a big business. Suppose you have ten thousand customers. Suppose one of those customers provides over a quarter of your income. How much time and effort will you spend making sure you keep that one customer's business?

Exactly:

This places limits on what is politically possible. As Sen. Chris Murphy, D-Conn., put it succinctly at a recent event at Yale University, recalling his time fundraising in his recent (2012) campaign: “I talked a lot more about carried interest inside of that call room than I did in the supermarket.” (“Carried interest” refers to profits that private equity and hedge fund managers earn on investments.)

Murphy knows it is much easier to raise the kind of money he needs if he remains sympathetic to the concerns of private equity and hedge fund managers – and much harder if he supports increasing the tax rate on carried interest. Murphy is not alone. Every member of Congress faces the same concern. They don’t want to upset the people most likely to fund their campaigns, and will try their best to avoid doing so. As costs of elections for office run higher and higher, candidates and parties have less freedom to cross a potential donor. It amounts to what Lawrence Lessig has called “dependence corruption” – the way in which political discourse must necessarily shift to reflect the demands and opinions of the most active donors [Lee Drutman, "The Political 1% of the 1% in 2012," Sunlight Foundation, 2013.06.24].

Alas, the 2012 data don't tell us anything about John Thune or Tim Johnson, who weren't on the ballot. Rep. Kristi Noem was notably less dependent on the 1% of the 1% than the national average: $332K of her $2.77 million —12.0% — campaign war chest came from the top 1% of the 1%. Those 161 top donors still outbid all of the contributions from small donors (i.e., the unitemized contributions under $200), who coughed up $292K — 10.5% of Noem's campaign funds. Another $974K — 35.2% — of Noem's 2012 money came from PACs, whose funds come even more predominantly from the richest of the rich.

So who are the 1% of the 1% in South Dakota? Fifty of our neighbors make that list, mostly men, and almost exclusively Republican:

41 of those 50 top donors gave exclusively to Republican candidates. Only eight gave even a little money to Democrats; only two gave a majority of their money to Dems. It's no wonder Rick Weiland is making campaign finance an issue in the Senate race while M. Michael Rounds says keep those checks coming! and Annette Bosworth goes fishing for Koch sugar daddies.

Geographical note: 24 of South Dakota's 50 1% of the 1% live in Sioux Falls. Only five live in Rapid City. No other top donors live in West River; only two more (one from Pierre, one from Chamberlain) can see West River from their front porches. Four live at the Dakota Dunes country club.